Landlord Exit Guide
How to sell a rental property with tenants in Florida. Lease assignment, tenant rights, capital gains, 1031 exchange.
Yes. The new owner takes over the existing lease through lease assignment. Under Florida Statute 83 (Residential Landlord and Tenant Act), tenants have the right to remain through the end of their lease regardless of ownership changes. The buyer inherits all lease obligations including the security deposit.
(1) Sell with tenants in place - buyer takes over lease. Best for investor buyers. Cash buyers routinely purchase occupied properties. (2) Wait for lease expiry - give proper notice (60 days yearly, 15 days monthly). Sell vacant for higher price. (3) Negotiate tenant buyout - offer $500-$2,000 cash to vacate early (legal and common). (4) Cash for keys for problem tenants - offer enough to motivate voluntary departure.
Capital gains tax on profit (0%, 15%, or 20% federal rate based on income). Depreciation recapture at 25% - often the biggest surprise for landlords. No Section 121 primary residence exclusion for rentals. Florida has no state income tax. On a property purchased for $200K and sold for $350K with $50K depreciation claimed: capital gains on $150K appreciation + 25% recapture on $50K depreciation.
Yes. A 1031 exchange (IRC Section 1031) defers all capital gains and depreciation recapture by reinvesting proceeds into like-kind property. Requirements: identify replacement within 45 days, close within 180 days, use a qualified intermediary to hold funds, replacement must be equal or greater value. Powerful strategy but requires advance planning.
Properties with Section 8 tenants can be sold. The Housing Choice Voucher travels with the tenant, not the property. New owner must honor or properly terminate the HAP contract. Many investors specifically seek Section 8 properties for guaranteed government rent payments.
Cash buyer with tenants in place. No lease expiration wait, no eviction, no vacancy period. Buyer takes over lease, tenants, and security deposits at closing. Close in 7-14 days.
No legal requirement before listing. But need 12 hours notice for showings (FL 83.53). We recommend early communication.
Cannot evict solely to sell. Wait for lease expiry or negotiate a buyout.
Possible risk. Cash buyers eliminate showings - no tenant disruption.